The Child Tax Credit expanded temporarily, then returned to its previous form

Congress passed an expanded Child Tax Credit as part of the American Rescue Plan in March 2021. The expansion increased the credit from $2,000 per child to $3,600 for children under 6 and $3,000 for children ages 6 to 17. The payments were also made monthly instead of once a year at tax time. This expansion was temporary — it applied only to the 2021 tax year.

Starting in 2022, the credit returned to $2,000 per child and went back to being a single annual payment when you file your taxes. Congress did not pass legislation to extend the expanded version beyond 2021, so the higher amounts and monthly payments ended.

For the 2024 tax year and beyond, the credit remains at $2,000 per child. You claim it when you file your federal income tax return, not as monthly payments.

Key Takeaways

  • The expanded Child Tax Credit (higher amounts and monthly payments) existed only for the 2021 tax year.
  • In 2022 and later years, the credit went back to $2,000 per child, paid once annually at tax time.
  • Congress has not passed new legislation to restore the expanded version since it ended.
  • You claim the current $2,000 credit on your federal tax return using IRS Form 1040 and Schedule 8812.
  • Income limits apply: the credit begins to reduce at $400,000 for married couples filing jointly and $200,000 for single filers.

How the 2021 expansion worked

During 2021, the IRS sent monthly payments directly to families who met income requirements. Payments started in July 2021 and continued through December 2021 — six months of payments total. The amount depended on your child's age: $300 per month for children under 6, or $250 per month for children ages 6 to 17.

Families did not have to do anything special to receive the payments if they had filed a 2020 tax return. The IRS used that return to identify who was may be able to access and send the money automatically. Families who did not file a 2020 return could register through the IRS's Non-Filer Sign-Up Tool to receive the payments.

When you filed your 2021 tax return in 2022, you had to account for the monthly payments you received. If you were owed more than what you already received, you got the difference as a refund. If you received more than you were owed, you had to repay the difference when you filed.

What changed in 2022 and after

The expanded credit ended on December 31, 2021. Starting with the 2022 tax year, the credit returned to $2,000 per child. There were no monthly payments in 2022 or any year after. Instead, you claim the full $2,000 credit on your tax return and receive it as part of your refund or as a reduction in taxes owed.

The income limits also changed back to their previous levels. For 2022 and later, the credit begins to reduce at $400,000 for married couples filing jointly, $200,000 for single filers, and $200,000 for heads of household.

Income limits and who can claim the credit

To claim the $2,000 Child Tax Credit, your child must be under 17 at the end of the tax year, have a valid Social Security number, and be your dependent. You must also have earned income during the year — the credit is not available to people with no income.

The credit reduces by $50 for every $1,000 (or fraction of $1,000) of income above the threshold. If your income is $400,000 or more (for married couples filing jointly), you may not receive the full credit or any credit at all, depending on how many children you have.

You claim the credit on your federal tax return using IRS Form 1040 and Schedule 8812. You will need your child's Social Security number and proof of their relationship to you.

Proposals to restore the expanded credit

Several members of Congress have introduced bills to restore the expanded Child Tax Credit, but none have passed both chambers and been signed into law. These proposals have come and gone in different congressional sessions, but as of now, there is no active legislation that has become law.

If you want to know whether a new proposal has passed, you can check Congress.gov, which tracks all bills in real time. Search for "Child Tax Credit" to see what is currently being debated.

How to claim the credit on your 2024 tax return

When you file your federal income tax return for 2024 (which you file in early 2025), you will report the Child Tax Credit on Schedule 8812 if you have dependent children under 17. You will need each child's name, date of birth, and Social Security number.

If you use tax software, the program will walk you through the questions and calculate the credit automatically. If you file by paper, you will fill out Schedule 8812 and attach it to your Form 1040. If you use a tax preparer, they will handle this step for you.

The credit reduces your federal income tax dollar-for-dollar. If the credit is larger than the tax you owe, you may receive the excess as a refund, but only up to $1,700 per child (the refundable portion of the credit).

Frequently Asked Questions

Will Congress bring back the expanded Child Tax Credit?

Congress has not passed legislation to restore the expanded credit since it ended in 2021. Proposals have been introduced in different sessions, but none have become law. You can check Congress.gov to see if new bills are being debated, but there is no current law that extends the higher amounts or monthly payments.

Can I get the monthly payments again?

No. Monthly payments ended on December 31, 2021. The credit is now paid once per year when you file your tax return. If Congress passes new legislation in the future, that could change, but it has not happened yet.

What if I received too much in 2021 payments and owe money back?

When you filed your 2021 tax return, you reported the payments you received. If you owed money back, it reduced your refund or increased the tax you owed. If you have not filed your 2021 return yet, you should do so to settle the amount. The IRS can also work out a payment plan if you cannot pay the full amount at once.

Do I have to do anything special to claim the credit in 2024?

No special action is needed. When you file your 2024 tax return, you will report your dependent children and claim the $2,000 credit on Schedule 8812. If you use a tax preparer or tax software, they will handle this automatically.